Highwood Properties Buys Pittsburgh’s Crown Jewel
- Sep 22, 2011
by Liviu Oltean, Associate Editor
Highwood Properties Inc. has recently added two important office buildings to its portfolio: PPG Place in Pittsburgh for $189.1 million and Riverwood 100 in Atlanta for $78.3 million.
PPG Place is a six-building Class A office complex that encompasses about 1.5 million square feet of office space with an 81.2 percent occupancy rate. According to a press release, Highwood Properties is planning to invest $25 million in improvements: $17.1 million of planned near-term building improvements and $8.1 million of future tenant improvements. With a secured debt of $124.9 million (carrying a 4.27 percent interest rate) that will mature in November 2017, Highwood invested a total of $214.1 million in the Pittsburgh-based complex.
Ed Fritsch, President and CEO with Highwood Properties, stated that the acquisition is based on a strategic plan that focuses on a balanced portfolio, and maximizing growth and long-term profitability. The decision to buy PPG Place was due to an increasing interest of investors in Pittsburgh’s diverse economy.
Riverwood 100 is a 24-story, 503,000 square-foot class A office building. Highwood will make $8 million in improvements. Located in the Cumberland Galleria/I-75 submarket of Atlanta, the office building is 87.0 percent leased. The transaction has a secured debt of $67.9 million, with a 5.45 percent interest rate that will mature in January 2014. With the acquisition of Riverwood 100, Highwood Properties has about 3 million square feet of office buildings across 21 buildings in the area.
“Our $300 million investment includes projected near-term building improvements, a significant portion of which will be used to ‘Highwoodtize’ these assets and further differentiate them from the competitive set,” said Fritsch.
Highwood Properties, a Raleigh-based REIT, owns or has an interest in 339 in-service office, industrial and retail properties throughout the U.S. that encompass about 34.8 million square feet.